A week ago, EHang Holdings Limited (NASDAQ:EH) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Sales crushed expectations at CN¥19m, beating expectations by 36%. EHang Holdings reported a statutory loss of CN¥0.36 per share, which - although not amazing - was much smaller than the analysts predicted. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for EHang Holdings from twin analysts is for revenues of CN¥477.6m in 2020 which, if met, would be a substantial 267% increase on its sales over the past 12 months. EHang Holdings is also expected to turn profitable, with statutory earnings of CN¥0.88 per share. Before this earnings report, the analysts had been forecasting revenues of CN¥387.7m and earnings per share (EPS) of CN¥0.67 in 2020. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CN¥99.97, suggesting that the forecast performance does not have a long term impact on the company's valuation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that EHang Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 267% revenue growth noticeably faster than its historical growth of 125% over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.3% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that EHang Holdings is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around EHang Holdings' earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for EHang Holdings going out as far as 2022, and you can see them free on our platform here.
We also provide an overview of the EHang Holdings Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.